Thursday, December 1, 2011

Talbot's to Close 110 Stores

More retail doom was in the offing today with the announcement by clothing retailer Talbot's that it plans to axe 110 stores:

Talbot's Inc. said Thursday it'll cut 9% of its corporate headcount and close 110 stores by 2013, after it swung to a third-quarter loss and projected lower sales in the coming quarter. Talbot's said it lost $22 million, or 32 cents a share in the third quarter, compared to income of $17 million, or 24 cents a share, in the year-ago period. Talbot's adjusted loss was 22 cents a share in the latest quarter. Sales fell to about $280 million, from $299 million. Wall Street analysts expected Talbot's to report a loss of 16 cents a share on sales of $271.3 million, according to a survey by FactSet Research. Talbot's November same-store sales dropped 4%. Talbot's said it plans to save about $50 million a year by cutting staff and closing stores. It'll shut 83 locations in 2011, 25 in 2012 and two more in 2013.

Interesting that they would take such a drastic action based upon one bad quarter. It is almost enough to lead one to believe that Talbot's corporate management expects that the recent quarterly loss will not be merely a short-term phenomenon but a permanent change in business conditions. I'll bet they are right.